Today’s Bargain = Tomorrow’s Fools Price
We are waiting for 20% correction in the particular area where we want to buy. The correction might be steeper than that but we will buy to own for a long time so we could would ride out the rest of the downward trend. There are micro forces in this particular area that we think will prevent it from going down as much as other spots. The rents in that area are currently about 1/2 the morgage of the home. We need it to even out much more than that.
There are other areas in SD that I would not buy even at a 30% correction as I think they are more vulnerable.
The way I see it, these people are sideliners:
— People who would normally be moving up but have decided to stay put.
— People who would would buy a vacation home but are waiting.
— Speculators and landlords who see the market cooling and are pulling out.
— People who sold and are now renting.
— First time buyers or people entering a market (moving, etc) who decide to wait.
So, even though a person owns a home, they can still be called a sideliner.
I’m sitting on the sidelines with very full pockets after selling my house at the high. We also know several other people who sold and are doing the same thing. I really want my own house again as I don’t like renting. We found a house a couple of weeks ago that we really wanted to buy but never made an offer because we don’t want to flush 150k down the toilet.
I’m a housing bear. My husband has a Masters in Real Estate Development. We have been doing a lot of research the last year and half. We sold our house in March of 2005 and locked in our profit (it is all air until it is in the bank). We moved into a rental in Coronado that is on the water. Our rent would only be enough to pay the property taxes and assoc. fees on this house if it was sold at the present value!
While we do not like renting, we feel confident that it will pay big dividends. I will be shocked if the San Diego market does not fall significantly.
Those people who have any form of adjustable mortgage right now are taking a big risk. Those mortgages are great in an upward moving market but are a bad bet in today’s uncertainty.
My prediction:
– Housing prices will really start to fall by Thanksgiving.
– Realtors and contruction people will start losing their jobs or quit making money. Unemployment starts to rise.
– The entire country could be looking at a recession starting about Thanksgiving (a whole separate issue but I think it is coming – this also shoots to pieces the “but jobs are great” argument).
– Housing prices drop further and continue downward for some time.
